How Much Does Annual Mileage Affect Car Insurance?
Updated on Tuesday 28 July 2020
Car insurance premiums are calculated by assessing a range of different factors, including your age, the type of vehicle you drive, your chosen level of cover, your occupation and, of course, your annual mileage (i.e. how many miles you typically drive over the course of a year).
While no one (other than insurers) knows which factors have the most impact on the cost of your car insurance, it is widely accepted that your annual mileage is a factor of high significance.
In this guide, we explain how mileage affects your car insurance premiums, what is considered ‘low mileage’, and how you might be able to get a specific low mileage insurance deal.
How mileage affects car insurance
As a rule of thumb, the higher your annual mileage is, the more expensive your car insurance premiums will be. This is because you are simply more likely to have an accident if you drive more miles.
For instance, someone who drives 30,000 miles per year is statistically more likely to be involved in a car accident than someone who drives just 8,000 miles per year.
Your mileage is an important factor in determining the cost of your premiums, and if you drive a very low amount of miles per year, you could even get a low mileage car insurance deal.
What is the average mileage per year in the UK?
The average person drives up to 10,000 miles per year, according to Statista, which is why many car leasing or finance deals you see will include a 10,000 miles per year mileage limit.
If you drive more than 10,000 miles in a year, you may find yourself paying slightly more for insurance than the equivalent driver who covers less distance.
What is considered low mileage?
Any number below 8-10,000 miles per year could be seen as low mileage, so someone who has an annual mileage of around 5,000 might be able to get a low-mileage insurance discount.
It’s worth noting, however, that each car insurance provider will have different views and criteria in regards to what they deem as high or low mileage. This is just one of the many reasons why you should always shop around and get car insurance quotes from a variety of insurers.
Low mileage car insurance in the UK
It’s undeniable that your annual mileage has an impact on your car insurance, and having a low mileage can help you save money on your premiums. The general consensus is that those with a higher mileage face more expensive insurance, and that may be the case, but there is also research that suggests low-mileage drivers may also be in danger of facing above-average premiums.
A study carried out by insurance broker, By Miles, found that 19 million low-mileage motorists (who drove 7,134 miles each year) in the UK were in danger of being over-charged for their car insurance.
This suggests that there may be a ‘sweet spot’ between eight and ten thousand miles per year. Does driving too infrequently also make you more at-risk of having an accident through a lack of experience on the road? This is, of course, largely speculation at this point, but it’s something worth thinking about.
The general rule of thumb is still that a higher mileage could lead to more expensive car insurance premiums, but you will never really know until you compare quotes.
Further savings with black box insurance
With black box car insurance, your mileage and other driving tendencies, such as your speed, acceleration and cornering skills, are measured and reported back to the insurance provider as evidence of your safe driving.
If you prove that you are a sensible driver, or that you drive few miles, you may be offered discounted car insurance.
Estimating your mileage for car insurance
When you apply for car insurance, you will be asked what your annual mileage is, and many people may not know an exact amount. If that’s the case, you would then need to estimate how many miles you typically cover over the course of a year.
If you have been driving for a few years and are unsure of your annual mileage, one place to start is your previous MOT certificates. Every MOT certificate includes the mileage of the vehicle when it is tested, so assuming you have yearly certificates, you should be able to use them to calculate an average annual mileage.
If your circumstances are changing – you have a new job that requires commuting or you are retiring and plan on travelling around the UK in your campervan, for example – you will want to take this into consideration when calculating how many miles you may cover in the next 12 months.
Put some genuine thought into your estimated annual mileage, and always provide the most accurate figure possible.
Underestimating mileage on car insurance
Some people are tempted to purposely underestimate their annual mileage when applying for car insurance, as it can potentially reduce the cost of cover, but this could have serious consequences.
While you will not be penalised if there is a minor difference between your estimate and true annual mileage, a significant difference – say, a 10,000-mile underestimation – could lead to your policy becoming invalid or void.
If you ever need to make a claim and your insurance provider finds that your annual mileage estimation is much lower than how far you really travel in your car, they could refuse to pay-out and your premiums will have gone to waste.
Your best option is to be honest with your provider, even if that means stating that you drive 20 or 30,000 miles in a year. While it may increase the cost of your car insurance slightly, at least you can rest easy in knowing that your policy will remain valid and will pay out if ever you need to make a claim.
Pay as you go car insurance
Those who drive very few miles per year may want to consider pay as you go (pay-per-mile or pay-per-hour) car insurance, where policyholders literally pay for cover as they drive, rather than the entire year.
These policies use telematics technology to let you pay for cover per mile or per hour and could save you hundreds of pounds if you use your vehicle rarely or only for short journeys.
Read more in our full guide to pay as you go car insurance.
How to reduce your annual mileage
The obvious solution to lowering your annual mileage is to drive less often, but this isn’t always possible and it’s easier said than done, particularly for those who drive to work.
Instead of driving to work as you normally would, why not try car sharing with a colleague or even a friend that works nearby? Sharing the driving responsibilities not only reduces the distance you drive yearly and therefore your car insurance premiums (potentially), but it also saves you money on petrol and reduces the wear and tear of your car.
You could also walk or cycle to your workplace if it is local, even if you do so just a few times per week; it will still save you money.
Give a thought to your hobbies and what you do outside of work as well – could you take public transport more? Are there certain journeys that you could cover on-foot rather than getting behind the wheel?
Making small adjustments to your every-day life could help you save hundreds of pounds on both car insurance and petrol, and what’s more, you get the added pleasure of becoming more environmentally friendly as you save.
For more information on getting cheaper cover, head over to our related guides, or tap the button below for an instant car insurance quote: